Telstra shares have been a fixture of Australian portfolios for a quarter of a century, which makes them an ideal candidate for a decade-long check-up.
So if you had put $10,000 into Telstra Group Ltd (ASX: TLS) in August 2016, where would you stand today?
The answer says a great deal about how income investing actually works.
The short version is that the share price went backwards, while the dividends quietly did all the work.
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What $10,000 in Telstra shares bought in 2016
Telstra's own dividend records give us a clean anchor point.
The dividend reinvestment plan price struck after the August 2016 final dividend was $5.2587, so a $10,000 investment would have bought roughly 1,901 shares.
The stock did touch its highest level since 2016 back in May, before easing away from it again.
At today's price of $5.02, those 1,901 shares are worth approximately $9,543.
On price alone, a decade of ownership has gone backwards by about 4.6%.
This is a sobering result for a company held in more Australian portfolios than almost any other.
The dividends did the heavy lifting
Capital growth is only half the picture for a stock like this one.
Telstra paid 19 separate dividends over the period, which add up to 197.5 cents per share.
On a 1,901-share holding, that is approximately $3,754 in cash income, lifting the total to roughly $13,297.
Then there are franking credits.
All but one cent of those dividends were fully franked, so an investor able to use them in full would collect roughly $1,601 more.
That takes the grossed-up outcome to approximately $14,898.
A $10,000 stake has therefore become around $14,898 over ten years, which works out at roughly 4.1% a year. Strip out the franking and the figure falls to about 2.9% a year.
Why Telstra shares went sideways for so long
The lost decade has a clear cause.
The National Broadband Network rollout stripped out high-margin fixed-line earnings across the second half of the 2010s, and that pressure forced dividend cuts between 2016 and 2020.
The annual payout fell from 31 cents to 16 cents.
Since then, the dividend has climbed back in almost every year, and the interim payment for the first half of FY26 was 10.5 cents per share.
Infrastructure monetisation has been the other half of the turnaround.
Tower leasing, data centres, subsea cables and NBN-related payments now provide long-duration cash flows that look less like a traditional telco and more like an infrastructure business.
Telstra shares now sit closer to an infrastructure valuation than the growth multiple they once carried.
Foolish takeaway
For context, an index fund tracking the ASX 200 would have done considerably better, with a $10,000 investment ten years ago worth approximately $22,000 today.
So Telstra shares underperformed the market, and by a wide margin.
Anyone comparing the two should also remember that the index return required no stock-picking at all.
But the income was reliable, fully franked, and it grew again once the reset was complete.
That is the trade-off income investors accept when they buy a mature, heavily regulated business.
The dividend does the work while the share price waits.
